Alleged Immigration Scam Results in Frozen Assets

A South Florida woman and her company last week were accused of misusing funds procured through the EB-5 Immigrant Investor Pilot Program, and subsequently the US District Court for the Southern District of Florida has ordered all her assets frozen until an investigation by the Securities and Exchange Commission (SEC) into her activities can be completed.

Lin Zhong, who also goes by the name Lily Zhong, allegedly raised over eight million dollars with her company EB5 Asset Manager LLC, but diverted nearly one million to purchase a car, boat and other luxury items with the funds. Director of the SEC’s Miami Regional Office, Eric I Bustillo, said in the complaint filed against Zhong, “We allege that Zhong promised investors their money would be used to develop real estate projects, but she misused their funds to enrich herself while making material misrepresentations and omissions to investors.”

The EB-5 Immigrant Investor Pilot Program Zhong’s company was supposed to be raising funds for is a program that allows investors to apply for residency in the United States if they make a qualified investment of over $500,000 for a specific project that creates or preserves at least 10 jobs for US workers.

The law that allows these “bought” visas, which was enacted in 1990, has come under scrutiny before because many feel the idea of foreigners being able to purchase permanent entry into the country goes against American ideals. As well as that, unlike the employment- or family-based residency sponsorships, it’s a road to immigration that is pretty unregulated, meaning that people like Zhong can find funding for ventures that have absolutely no guarantee of becoming a reality, and because many potential investors suffer from language barriers – over 80% of them come from China – there’s a much higher risk of them being taken advantage of.

However, it is also a road that gets busier every year. In 2014, the government issued almost enough visas to reach the 10,000 limit, which was more than its first 17 years combined. The program at present brings in over $1.8 billion to the US annually, and it shows no signs of slowing down, most likely due to ever-increasing restrictions being put on immigration into the country. Those who have the capital and are looking to find a way to secure residency seem more and more to be turning to the EB-5 program as their way in – which means more and more fraudulent ventures are also sure to arise.

In the case of Lin Zhong, on top of her assets being frozen the court also ordered expedited discovery and prohibited any documents from being destroyed, as well as requiring Zhong to provide a sworn accounting of her company’s assets.

If you would like legal consultation or more information about the EB-5 Immigrant Investor Pilot Program, please get in touch with Lyttle Law Firm for assistance. You can send an enquiry through the website, or by calling 512-215-5225.